📈 Microsoft wins

Wall Street cheers Microsoft’s ‘coup’ as stock hits all-time high, Nearly all of OpenAI staff threaten to follow Altman to Microsoft, Benioff woos disaffected OpenAI staff to Salesforce, Citigroup employees brace for layoffs in management overhaul, and Senate committee subpoenas Live Nation and Ticketmaster in months-long probe...

November 21, 2023

☕️ Good Morning.

The Fast Five → Wall Street cheers Microsoft’s ‘coup’ as stock hits all-time high, Nearly all of OpenAI staff threaten to follow Altman to Microsoft, Benioff woos disaffected OpenAI staff to Salesforce, Citigroup employees brace for layoffs in management overhaul, and Senate committee subpoenas Live Nation and Ticketmaster in months-long probe…

Your 5-minute briefing for Tuesday:

BEFORE THE OPEN

As of market close 11/20/2023.

MARKETS:

  • Stock futures hover near the flat line on Monday evening.

  • Microsoft climbs 2% on news of former OpenAI CEO leading its AI research team; Nvidia adds 2.3%, reaching an all-time high.

  • S&P 500's tech sector gains 1.5%.

  • Shortened trading week due to Thanksgiving holiday with an early Friday close.

EARNINGS

  • Zoom reported better-than-expected Q3 earnings and revenue on strong enterprise sales (Read More)

  • What we're watching this week:

    • Today: Nvidia, HP, Lowe’s, Autodesk, Medtronic, Abercrombie & Fitch, Best Buy, Nordstrom

    • Wednesday: Deere

    • Thursday: Royal Bank of Canada

  • Full calendar here

NEWS BRIEFING

  • OpenAI Latest:

    • Wall Street Cheers Microsoft's 'Coup' Hiring Altman After OpenAI Ouster, Stock Hits All-Time High (Read More)

    • Nearly All of OpenAI Staff Threaten to Go to Microsoft If Board Doesn’t Quit [Letter] (Read More)

    • Sam Altman is still may return as OpenAI CEO (Read More)

    • Satya Nadella speaks [video]

    • Benioff woos disaffected OpenAI staff to Salesforce with offer to match pay (Read More)

    • Microsoft emerges as big winner from OpenAI turmoil (Read More)

  • Citigroup employees brace for layoffs, management overhaul (Read More)

  • Senate committee subpoenas Live Nation, Ticketmaster after months-long probe (Read More)

  • Amazon launches free AI classes in bid to win talent arms race (Read More)

  • Argentina’s new president wants to adopt US dollar as the national currency (Read More)

  • California’s pump prices fall below $5 for first time since July (Read More)

  • Bitcoin ETF hype has Wall Street eyeing $100B crypto potential (Read More)

  • X sues Media Matters after report about ads next to antisemitic content (Read More)

  • United Steelworkers union complains it’s in the dark on US Steel auction (Read More)

  • Amazon sued by three employees who allege gender discrimination and ‘chronic’ pay inequity (Read More)

  • The NFL’s billion dollars’ worth of injured quarterbacks (Read More)

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CRYPTO

  • The US is seeking over $4B from Binance as part of a resolution to end its year-long investigation into the exchange (Read More)

  • USDC stablecoin issuer Tether froze $225M worth of its stablecoin following a US DOJ investigation into an international human trafficking syndicate in Southeast Asia (Read More)

  • Cathie Wood’s ARK Investment Management and digital-asset firm 21Shares plan to charge a 0.80% management fee on their spot Bitcoin ETF (Read More)

BULLISH BITES

🩸 It’s messy: Venture Capital’s 2023 bloodbath, by the numbers

🎮 Not just kid play: Toy companies aim more products at older adults

%. Head’s up: What you need to know about IRS tax changes for 2024

💸 Fool me once: Why did America’s elite keep falling for Crypto frauds?

FEATURED TRADES

Silver Beech holding: Citigroup (NYSE: “C”)

Citigroup Inc., a diversified financial services holding company, provides various financial products and services to consumers, corporations, governments, and institutions in North America, Latin America, Asia, Europe, the Middle East, and Africa.

Ticker: C | Price: $45.48 | Price Target: $85 (+87%) | Timeframe: N/A

🏦 Banking | 📈 Bullish Idea

Citigroup (NYSE: “C”), a major global financial services holding company, is undervalued by the market at approximately 0.48x tangible book value despite being less risky than ever before. The company's historical challenges, including the Great Financial Crisis bailout and a costly global consumer bank, have led to a negative market perception and a lower ROE of about 7% compared to peers' 10%+. However, Citi’s leading position as a "global systemically important bank" has mandated higher capital ratios and less risk-taking, particularly in its high-growth Treasury and Trade Solutions segment. With a CET1 ratio that has increased from 10.6% to 13.5% over the past decade and a substantial margin of safety, Citi is well-protected against loan losses, even in severe economic downturns. Despite potential credit losses, Citi’s tangible common equity would remain robust compared to its current market cap, suggesting the stock is cheap relative to its adjusted tangible book value. Trading at a P/E of ~6.8x 2023E earnings, Citi’s shares are significantly undervalued, with a base case worth of more than $68 per share (~0.8x tangible book value). Management’s ongoing corporate transformation, divesting the global consumer bank and focusing on higher growth, premium ROE activities, could justify a revaluation closer to peers, with an upside case of more than $85 per share.

Read the full article here. Read time: 8 min

DAILY SHARES

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